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C-PACE: A financing tool for building owners

Clean Energy Finance and Investment Authority. C-PACE: A financing tool for building owners. Agenda. Who is CEFIA? What is C-PACE? The C-PACE Advantage CEFIA’s Role in Designing C-PACE The C-PACE Process. Energy Challenge in Connecticut. 3. Who is CEFIA?.

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C-PACE: A financing tool for building owners

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  1. Clean Energy Finance and Investment Authority C-PACE:A financing tool for building owners

  2. Agenda • Who is CEFIA? • What is C-PACE? • The C-PACE Advantage • CEFIA’s Role in Designing C-PACE • The C-PACE Process

  3. Energy Challenge in Connecticut 3

  4. Who is CEFIA? • Support the Governor’s and legislature’s energy strategy to achieve cleaner, cheaper and more reliable sources of energy while creating jobs and supporting local economic development

  5. Agenda • Who is CEFIA? • What is C-PACE? • The C-PACE Advantage • CEFIA’s Role in Designing C-PACE • The C-PACE Process

  6. Property Assessed Clean Energy • An innovative financing structure that enables commercial, industrial, and multi-familyproperty owners to access financing for qualified energy upgrades and repay through a benefit assessment on their property tax.

  7. CRE owners face barriers to upgrades

  8. C-PACE Addresses Key Barriers Near term plan to sell? Lack of funding? Cannot assume more debt? Insufficient payback/ROI? Split incentives? Uncertain savings/technical expertise? Tax obligation fixed to property 100% upfront, 20 year financing Assessments may qualify as OPEX Positive cash flow in year 1 Assessment/savings pass to tenants Technical underwriting / SIR>1

  9. Connecticut Special Session Public Act 12-2 (June 2012) • Commercial, industrial & multi-family property • Requires the consent of the existing mortgage lender • Requires SIR>1; permanently affixed • Enables municipalities to opt-in • Enables CEFIA to administer a statewide program

  10. C-PACE Advantage to other stakeholders

  11. Agenda • Who is CEFIA? • What is C-PACE? • The C-PACE Advantage • CEFIA’s Role in Designing C-PACE • The C-PACE Process

  12. CEFIA’s Role in C-PACE

  13. Ansonia Avon Beacon Falls Berlin Bethel Bloomfield Branford Bridgeport Brookfield Canaan Canton Chester Clinton Coventry Danbury Darien Durham East Granby East Haddam Stamford Stonington Stratford Suffield Tolland Torrington Trumbull Vernon Waterbury Waterford Watertown West Hartford West Haven Westbrook Westport Wethersfield Wilton Windham Windsor Windsor Locks New Haven New London New Milford Newtown North Branford North Canaan Norwalk Norwich Old Saybrook Plainville Portland Putnam Rocky Hill Seymour Sharon Simsbury Southbury Southington Sprague Stafford East Hampton East Hartford East Windsor Enfield Fairfield Farmington Glastonbury Granby Greenwich Groton Hamden Hartford Killingworth Manchester Mansfield Meriden Middletown Milford Montville New Britain Municipalities Opted into C-PACE

  14. 80% C&I Market Municipalities Opted into C-PACE

  15. A written agreement, as approved by the municipality’s legislative body, pursuant to which the municipality has agreed to assess, collect, remit and assign, benefit assessments to the Authority in return for energy improvements for benefited property owners within the municipality and for costs reasonably incurred by the municipality in performing such duties. How Municipalities Opt into C-PACE Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury 15

  16. Role of Municipalities: Placing of Caveat on Land Records Levy of Benefit Assessment Continuation, Recording and Release of Lien Assignment of Benefit Assessment Lien Billing and Collection; Payment to CEFIA Role of CEFIA: Design program & financing requirements Determine the estimated benefit assessment and provide written notice of the estimated benefit assessment to the Municipality Compensate municipality for costs incurred How Municipalities Opt into C-PACE Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury 16

  17. Customers Apply Into C-PACE Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury 17

  18. C-PACE Partners do Technical Underwriting Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  19. Anything that saves energy from baseline High efficiency lighting HVAC upgrades New automated building and HVAC controls Variable speed drives (VSDs) on motors fans and pumps High efficiency chillers, boilers, and furnaces High efficiency hot water heating systems …as long as it isn’t going anywhere Combustion and burner upgrades Fuel switching Water conservation Heat recovery and steam traps Building enclosure/envelope improvements BMS Renewable energy systems Determine project eligibility Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  20. CEFIA Sources Capital Construction and Term Financing from CEFIA • CEFIA authorized $40M short term facility for construction and term financing • Sells down transaction through bid process Qualified Capital Providers • CEFIA qualified 14 capital providers through a RFI. Owner Arranged Financing • Property owner is free to choose their capital provider from the private market. There is no government financing required. Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  21. M&V: Data Management Platform 21

  22. The C-PACE Process • 1. Building owner engages contractor to develop scope of work; works with utilities (CEEF) to incorporate incentives • 2. Owner applies to C-PACE program at www.c-pace.com • 3. Third party review of technical and financial details

  23. The C-PACE Process • 4. C-PACE alerts municipality; lien is placed on property • 5. CEFIA offers 100% upfront financing to owner • 6.Project commences

  24. The C-PACE Process • 7. Owner remits payment to municipality as benefit assessment charge • 8. Municipality remits PACE assessment to CEFIA • 9. CEFIA “sells down” transaction to capital provider to replenish funds

  25. Case Study: Solar and Lighting UpgradeNorwalk Shopping Center Project • $550,000 exterior LED lighting upgrade and solar parking canopy. Financing • $185,000 of lighting upgrade financed through 13 year C-PACE assessment. CEFIA providing construction financing. • $365,000 solar parking canopy received a ZREC • Savings of $55,000 plus 30% ITC Impact • 741k kBTUssaved • Produces 5.8M kWh in clean energy Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  26. Case Study: Energy Efficiency Upgrade 855 Main Street Bridgeport Project • $1,990,000 energy efficiency measures, ranging from the installation of variable frequency drives to chiller replacements to new energy efficient windows to new cooling towers. Financing • Save owners $241k per year versus $166k in annual C-PACE assessment. Net savings of $80k. Impact • 133M kBTUs saved over life of project Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  27. Case Study: Boiler ReplacementBushnell Center for the Performing Arts Project • $650,000 boiler replacement Financing • $384,000 of replacement financed through 20 year C-PACE assessment. • $250,000 covered with grant from Department of Economic and Community Development. Impact • Annual savings of $48,000 Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  28. Case Study: Energy Efficiency Upgrade in Simsbury Project • $675,000 energy efficiency upgrade, including • Installation of Air Leakage Improvements • High Efficiency lights • Occupancy Sensors and Upgraded Energy Management System • New Rooftop Units Financing • Annual savings $61,000 Impact • 18M kBTU saved Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  29. Case Study: Solar and Energy Efficiency Upgrade in Middletown Project • $2,535,766 including • the installation of air units, variable frequency drives, high efficiency lights, occupancy sensors, air leakage improvements, an upgraded energy management system, • and a 260 kW ground-mounted photovoltaic system. Financing • Energy savings of $224,272 annually Impact • 51M kBTUs saved • 8.5M kWh clean energy produced Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  30. Case Study: Solar Project in Hartford Project • $145,000 solar installation Financing • ZREC award of $164.22 / MWh from CL&P, • With ZREC and energy savings, owner expected to see revenue of $21,385 per year Impact • 1.3M kWh clean energy produced Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  31. Case Study: Solar Project in Hartford Project • $325,000 solar installation Financing • ZREC award of $164.22 / MWh from CL&P, • With ZREC and energy savings, owner expected to see revenue of $49,916 per year Impact • 2,8M kWh clean energy produced Hartford West Hartford Bridgeport Norwalk Simsbury Stamford Stratford Southbury

  32. C-PACE & Clean Energy Communities Program

  33. C-PACE & Renewable Requirement • Municipal Commitment • Opting into C-PACE earns 10% (nearly 2/3 of current requirement and 1/2 of 2018 requirement) • Signed agreement with CEFIA • Outreach Opportunities • C-PACE Outreach campaigns earn 1-5% (depends on scope) • Submit report detailing outreach efforts 10%

  34. C-PACE Outreach Campaigns • B2B Breakfast Meeting • Partner with Town, Economic Development, Chamber of Commerce • Invite large commercial property owners • Postcard Mailers

  35. C-PACE & CEC Points • Each completed C-PACE project = 20 points • Each C-PACE application = 5 points • Participation in Energy Efficiency programs also earn points on EE Track 542 Westport Ave., Norwalk Bushnell Theater, Hartford InSports, Trumbull

  36. For More Information on C-PACE (www.c-pace.com):Jessica Bailey, Director C-PACE, CEFIA860.257.2888Jessica.Bailey@ctcleanenergy.comWill McCalpin, Project Assistant, Commercial & Industrial Programs, CEFIA 860.257.2176Will.McAlpin@ctcleanenergy.comFor More Information on Clean Energy Communities (www.EnergizeCT.com/communities):Bob Wall, Associate Director, Outreach, CEFIA860.257.2354Bob.Wall@ctcleanenergy.com

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